U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the June edition of the Obama Administration’s Housing Scorecard Thursday. It paints a picture of a housing market that is improving but still subject to ebbs and flows of the broader economy.

“The June Housing Scorecard shows the housing market continues to make progress as we move into the summer months,” said HUD Assistant Secretary for Policy Development and Research Katherine O’Regan. “Sales of new and existing homes are up, equity continues to grow, and foreclosures starts continue trending down. While these are all signs of a healthy recovery, given the severity of the housing crisis, we must stay committed to helping homeowners.”

The report echoed many reports of recent months that foreclosures are down, both from the previous month and year-over-year. Foreclosure starts are down 32 percent from this point last year, falling to their lowest level since 2005. Likewise, foreclosure completions are also down to an 82 month low, dropping 27 percent from last year

The report emphasized the steps that the government has taken to ensure that homeowners are as insulated as possible from the treat of foreclosure. All in all, the report contends, more than 8.5 million mortgage modification and other forms of mortgage assistance arrangements were completed between April 2009 and the end of May 2014 through citizens taking advantage of the Home Affordable Refinance Program (HARP), the Home Affordable Modification Program (HAMP), and other programs.

San Antonio Mayor Julian Castro, the president’s pick to replace Shaun Donovan as secretary of HUD, appeared to breeze through his first nomination challenge Tuesday as he fielded questions from the Senate Banking Committee.

Appearing before the committee for his nomination hearing, Castro, whose work in San Antonio includes an initiative to spark private investment for the production of thousands of additional housing units in the city in 2014 alone, opened his testimony with reassurances that his leadership would have HUD focusing on “outcomes, not only inputs.”

“We shouldn’t just track projects and dollars spent. We must measure those investments by the impact they make,” he said.

Facing questions from the group of senators, Castro addressed the current stability and role of the Federal Housing Administration (FHA), which had to take a $1.7 billion bailout last year for the first time in its history as a result of losses suffered from mortgages insured as the housing market collapsed.

Noting that FHA’s financial position has improved as a result of changes adopted by the agency, Castro admitted “there can be action taken to ensure that the FHA stays on a positive track,” though he was non-specific regarding any plans.

In the wake of the housing and foreclosure crisis, the agency has drawn no small amount of fire from critics who say its standards have become too loose on loans it insures.

This is good news for both the FHA and Taxpayers. The FHA can reach is mandated reserves I the Taxpayers won’t have to shell out any more money for the banks screw-ups. For a more detailed look at this subject – please read the article below.

More than a year after reporting a shortfall of $16.3 billion in the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance (MMI) fund, HUD announced significant improvements in the agency’s financial situation—though the fund remains in the red.

An actuarial report released Friday shows FHA’s insurance fund for single-family home loans has regained $15 billion dollars in value over the last year, bringing it to -$1.3 billion dollars and a capital ratio of -0.11 percent. By law, the federal insurer is supposed to maintain a capital reserve ratio of 2 percent, a goal it expects to meet in 2015.

As of now, the agency maintains more than $48 billion in liquid assets to pay expected claims.

“What is clear from the independent actuarial report is that the aggressive steps we have taken have made FHA stronger and put it on a sustainable path to fulfill its dual mission of supporting access to homeownership for underserved and low-wealth borrowers as well as supporting and stabilizing the housing market,” said HUD Secretary Shaun Donovan.

“We look to the future and remain committed to continuing our progress to strengthen the MMI Fund so that ladders of opportunity are available to all Americans for generations to come,” he added.

The actuarial report points to a number of factors driving the improvement in FHA’s finances, including declines in early payment defaults—to their lowest levels in seven years, thanks to improved underwriting in more recent books of business—and drops in serious delinquency and foreclosure rates as a result of enhanced loss mitigation efforts.

It just makes sense that along with GSE reforms FHA changes should go hand in hand. Without both updates the overall goals would not be achievable. For a more detailed look at this subject please read the article below.

As the government works toward GSE reform, Keefe, Bruyette & Woods (KBW), a financial services provider, says reform for the Federal Housing Administration (FHA) should also be a top concern.

“While FHA reform has been discussed, it has clearly played a secondary role to the more pressing issue of GSE reform,” KBW stated in a recent report.

KBW continued, “However, we continue to believe that the two have to be done in conjunction to avoid a potential shift in volume back to the FHA.”

The agency grew from a portfolio of about $400 billion before the housing crisis to about $1.1 trillion since, all while its capital reserves fell to -1.44 percent in 2012 despite a mandated minimum of 2 percent.

The FHA reported a projected capital reserve of -0.4 percent for this year before a rise to 0.2 percent in 2014.

Meanwhile, the agency has upped its premiums and received $1.7 billion from the Treasury to bolster its financial status and keep the agency viable.

In addition, the FHA plans to sell about 40,000 distressed loans in its portfolio this year, and it is focused on loss mitigation strategies in order to reduce potential losses.

While its portfolio remains large, the FHA has reduced its footprint in the market somewhat. In particular, the agency has reduced its share of low down payment loans from more than 80 percent of the market to about 50 percent, according to KBW.

This is kind of a misleading Headline as the FHA in not making any concessions as they have no concessions to offer. The FHA is only asking approved mortgagees and lenders to do so but it is entirely up to them if they will do so. For a more detailed look at this subject please read the article below.

The Federal Housing Administration (FHA) called on all approved mortgagees and lenders to be sensitive to the financial hardships some borrowers are facing as a result of the federal government shutdown, including borrowers subject to furlough, layoff, or a reduction in income.

In a notice to its industry partners, FHA said it expects all approved mortgagees and lenders to “make every effort” to communicate with and assist affected borrowers “to the greatest extent possible” by extending informal forbearance plans and fully evaluating borrowers for available loss mitigation options to avoid foreclosure whenever possible.

“These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries,” said FHA Commissioner Carol Galante in a letter to FHA-approved lenders and mortgagees. “In many instances these are the same employees who have already lost pay during recent sequestration related furloughs.”

FHA joins Fannie Mae, Freddie Mac, and the Veterans’ Administration in urging lenders to take action to protect those federal workers impacted by the shutdown.

If this is the new definition of what a Qualified Mortgage is, what was the old one? There also seems to be no reference to the borrower having any ability to repay the loan. Please read the article below.

HUD proposed a new definition of “qualified mortgage” (QM) in a statement released Monday. To meet the new QM requirements, a mortgage will have to require periodic payments, have terms not exceeding 30 years, limit upfront points and fees to no more than three percent with adjustments to facilitate smaller loans, and be insured or guaranteed by FHA or HUD.

The Dodd–Frank Act required HUD to propose a QM definition that is aligned with the ability-to-repay criteria set out in the Truth-in-Lending Act (TILA) as well as the department’s historic mission to promote affordable mortgage financing options for qualified lower income borrowers.

“The new limit on upfront points and fees for all Title II FHA-insured single family mortgages is consistent with the private sector and conventional mortgages guaranteed by Fannie Mae and Freddie Mac to attain qualified mortgage status under CFPB’s final rule.” HUD said in a statement. “Currently, HUD does not insure, guarantee or administer mortgages with risky features such as loans with excessively long terms (greater than 30 years), interest-only payments, or negative-amortization payments where the principal amount increases. Moreover, HUD’s existing underwriting standards require lenders to assess a borrower’s ability to repay their mortgage debt.”

The proposed rule establishes two categories of QMs that have different protective features for consumers and different legal consequences for lenders. HUD’s proposed Qualified Mortgage categories are determined by the relation of the Annual Percentage Rate (APR) of the loan to the Average Prime Offer Rate (APOR).

This is another case of the Government “Fixing” a problem that they had no evidence of it even existing. This rule would have produced wide spread havoc in the short sale market. At least they caught their foul-up in time to curtail the damage. Please read the article below.

HUD has delayed its prohibition of dual agency listings on short sale properties according to a statement made this week by the National Association of Realtors (NAR).

The HUD prohibition had first been outlined in a July letter to mortgage servicers describing new anti-fraud requirements for short sales and deed-in-lieu of foreclosure transactions. The original policy was slated to go into effect October 1, 2013.

In response, NAR President Gary Thomas wrote a letter to HUD outlining NAR’s concern with both the reasoning behind the prohibition and the possible consequences of it.

“NAR has been told that the policy was implemented because the HUD Inspector General detected fraud and abuse in the pre-foreclosure sales process; however, no statistics or reports were provided to NAR detailing short sale fraud by real estate agents,” the letter said. “NAR takes fraud very seriously…If there is evidence of fraud by our membership, we would like to be part of an effort to develop policies that effectively address these issues.”

Thomas’s letter also raised concerns about how a prohibition on dual listing would affect agents’ and brokers’ ability to effectively serve their clients.

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